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On May 1, 2015, the U.S. Court of Appeals for the Ninth Circuit issued an opinion in Center for Competitive Politics v. Harris, upholding a California regulation requiring charities that are registered to solicit contributions to file an unredacted copy of IRS Form 990 Schedule B. Schedule B of the Form 990 – which is required to be filed with the IRS but which is not subject to public disclosure – requires a listing of certain donors and donation amounts to tax-exempt 501(c)(3) organizations.

In order to solicit charitable contributions in California, charities must be registered with the California Office of Attorney General's Registry of Charitable Trusts and, subsequently, file annual reports to maintain their registration, which requires submitting a Form 990 Schedule B. Charities have successfully submitted redacted copies of their Form 990 Schedule B to the state in the past, but recently, the California Attorney General began requiring charities to submit unredacted copies disclosing "significant donors." The California Attorney General reasoned that having access to donor information enables the state to assess whether a charity is actually engaged in a charitable purpose or instead conducting fraudulent activities in violation of California law. Although documents filed with the Registry of Charitable Trusts are generally open to public inspection, Form 990 Schedule B is maintained confidentially and not made available to the public. (Note that the Form 990 also is subject to public inspection according to federal tax law, but Schedule B donor/contributor information may be redacted by the tax-exempt 501(c)(3) organization.)

In 2014, the Center for Competitive Politics (CCP), an educational nonprofit organization exempt under section 501(c)(3) of the federal tax code, challenged the California Attorney General's request for CCP's unredacted Schedule B, contending that the disclosure requirement violated the organization's First Amendment rights to freedom of association of CCP and its supporters. CCP also argued that federal law preempts California's disclosure requirement. The federal district court denied CCP's motion for a preliminary injunction, holding that CCP could not demonstrate that irreparable harm would result from the required disclosure or that the public interest weighed in favor of granting the relief requested.

On appeal, the Ninth Circuit rejected CCP's argument that the disclosure requirement caused injury to CCP and its supporters' exercise of their rights to freedom of association, holding that CCP could not show that its donors would experience threats, harassment, or other potentially chilling conduct as a result of the California Attorney General's disclosure requirement. On the contrary, the court held that the California Attorney General has a compelling interest in enforcing the laws of the state and that the disclosure requirement bears a "substantial relation" to the "sufficiently important" government interest of law enforcement. The Ninth Circuit also noted that the mandated disclosure at issue is only to the Attorney General's office and not to the general public, thus further arguing against the likelihood of negative consequences to donors.

Another related case, Americans for Prosperity Foundation v. Harris, is currently pending in the Ninth Circuit. There, the charitable organization also has challenged the California Attorney General's request that it disclose identifying information about its donors. Unlike the CCP case, which was held by the court to be facially constitutional, this case concerns whether the disclosure requirement is unlawful as applied to a particular organization. It is unlikely that the court will reach a different conclusion — particularly so close in time to the CCP decision — but it will be worth watching just in case.

The CCP decision is important because it paves the road for other state attorneys general to begin compelling charitable organizations to file unredacted Schedule Bs as a requirement for registering to solicit contributions and maintaining such registrations. California is one of at least five states that now require charitable organizations to file an unredacted Form 990 Schedule B – Hawaii, Kentucky, Mississippi, and New York have similar disclosure requirements.